Friday 24 January 2014

Rapid Changes in Meat Eating - All Down to Price and Horsegate.

 From BPEX and EBLEX comes interesting data about the nation’s meat eating trends. BPEX’s quarterly category report shows that fresh meat consumption in the year to mid October 2013 is down in tonnage by 2%, although up in value by 5%.

It is the differences in species consumption which are most fascinating, and they show that consumers are quick to change their buying patterns according to price.

For the first time for years the amount of fresh chicken eaten has gone down. The 3.5% drop is significant when considering that in the previous year consumption grew by 7%. The change is driven by prices which on average went up by almost 10%.

On the other side of the coin an average reduction in prices of 4% has seen lamb consumption grow by a whopping 12.5%. Again, this is a huge change in buying habits for the lamb market had been dropping year on year since 2008. BPEX tells us that pork, where volume sales have dropped by 4%, has been the biggest loser with leg and shoulder joint sales falling as consumers switch to lamb for their Sunday roast.

Over the same period beef consumption dropped by 1% as prices rose by an average of 6%.

 Horsegate fits into the picture because, EBLEX tells us, consumer concerns about exactly what it was they were eating drove retailers to buy more British produced meat. As a result supplies of beef, chicken and pork were tight and prices rose.

There are signs though that the pendulum may be swinging again. Stories are appearing about sizeable increases in imports of Polish and Irish beef, which if sold at a low enough price may trump shopper worries about how the meat was produced.

BPEX also publishes details of which supermarkets over or under trade in fresh meat relative to their market share for all groceries.

Tesco, ASDA, and the Coop under trade. Sainsbury, Waitrose, discounters ALDI and LIDL and beleaguered Morrison’s overtrade. Price alone is therefore not a guide to how well a supermarket might do on fresh meat sales. The overtraders are a mixture of the upmarket and pricey (Waitrose and Sainsbury) and the “noted for low prices” discounters and Morrisons. Conversely Asda and Tesco might be said to be operating at the lower end of the price spectrum yet under trade.

Doing well in meat demands a tricky balance of good value, good quality, provenance and trust. Get it wrong and shoppers will vote with their feet and take their meat buying elsewhere. The challenge is made more difficult by shoppers' increasing tendency to change their buying behaviour with lightning speed. 




Monday 13 January 2014

Spotlight on Morrisons – Why is it Struggling and What Can be Done to Stop the Rot


Supermarkets, apart from ASDA, have now reported their Christmas trading results. “Patchy” might be a good description with Aldi, Lidl and Waitrose booming, Marks and Spencer doing well, but Tesco and Morrisons down on the previous year. Even Sainsbury only managed 0.2% growth.

It was Morrisons who shocked most with a 5.6% drop in sales versus the previous year, and this at a time when the economy is generally agreed to be picking up.

Their performance highlights both long and short term issues. Their long term problems are well documented. Until last week they had no online presence at a time when more consumers are turning to the internet for grocery shopping: and they have few convenience stores which puts them at a disadvantage as people move away from mid week top up shopping in bigger stores, preferring to avoid temptation and buy just the essentials at their local convenience store.
   
Yet, neither Aldi nor Lidl offer online, and have few convenience shops, and Tesco offers both but is struggling.

Morrisons problems must therefore be more deep rooted than lagging behind in two growth areas.

Perhaps their biggest issue is that shoppers cannot see a compelling reason to shop at Morrisons. They are uncompetitive on price versus the discounters, and lack the quality reputation of Waitrose or Sainsbury. This lack of clarity about what the brand stands for is obvious when viewing the Morrisons Christmas advert, where the four points made about Morrison’s offer (service, wide variety, having their own chefs and “putting on a show for little dough”) were eclipsed by the undoubted star quality of Ant and Dec. Four messages were three too many,  and money would have been better spent on articulating one reason to shop at Morrisons rather than waste hundreds of thousands on personalities who drown out the message.

So Morrisons must get back to its roots and the core values that made it into a success. The company will have reams of consumer research to guide them, but price and value for money are likely to figure strongly.

Morrisons are too small to be able to match the discounters on the price of packaged goods. Both Aldi and Lidl are huge internationally and can use their buying clout to keep prices rock bottom. Rather, Morrisons should be focussing on the one thing that all of their competitors will find difficult to match, which is that Morrisons, by owning their own abattoirs, bakeries and fresh fruit and veg packing houses can offer fresh food at unbeatable prices.

They need also to be true to their values. It did not receive much publicity but at the back end of 2012 they started to stock an imported red meat brand called Helmsley. This was followed in November 2013 by imported chicken. Such stepping away from their stated policy of selling only UK produced meat does little to boost consumer confidence, and is the sign of a muddled thinking business.

It is to be hoped that Morrisons swiftly get back on track. The supermarket sector needs competition. The more successful supermarkets there are to choose from

the better for all in the food chain.